How Much Should I Insure My House For?

By Lucille Jakubowski, Alpine Insurance

Clients often call us at Alpine Insurancewhen they get their tax assessment notice from their civic office, especially if their assessment differs from their insurance amount. Surprisingly, it’s often the case that both values are correct. The reason for this is in the cost to rebuild a home with new materials of like kind and quality vs. theassessment ormarket value of the home.

While market values have shifted dramatically upwards and downwards just in the past few years, the costs to rebuild a home have only risen consistently, but not quite in such dramatic spikes. Costs to rebuild after an insurance loss include a substantial fee just for debris removal as well as permit costs, architect fees, style, location, special features, availability of the labour market and materials. All of these costs must be factored in to determine accurate rebuilding costs.
In past years insurers have set the dwelling limits by the broker’s calculations at the time of the original application, then applied an inflation factor on every renewal. However, after several years these values can become skewed, by the limits on the policy being either too high or too low or without considering renovations or additions made to the home, so more recently insurers have begun to ask for recalculations every two or three years.

At Alpine Insurance our focus is on the correct coverage, so we are always very glad to review your property insurance values along with the whole policy.